The Human Resource Development Council has received a $1.1 million loan from a new state program to place 12 affordable rental homes in Livingston.

HRDC purchased the modular homes and is repurposing them into seven one-bedroom and five two-bedroom homes for rent at below-market rates. The 12 new homes will sit on Reservoir Street near the Livingston Land Trust Cottages.

HRDC declined to comment for this story. In its application for the loan, the nonprofit said it “has a proven track record of experience in rental housing, development and a demonstrated commitment to low-income families.”

The 12 affordable single-family homes were made possible by the state’s new Multifamily Coal Trust Homes Program, which provides low-interest loans that can make affordable rental projects financially feasible, said Bruce Brensdal, the executive director of the Montana Board of Housing and the administrator of Montana House, which are overseeing the program.

The 2019 state Legislature created the program and appropriated $15 million from Montana’s Coal Tax Trust Fund for the loans.

“The demand for affordable housing is outpacing the supply in almost all our communities,” Brensdal said. “The multifamily coal trust fund helps us address this issue.”

The Department of Commerce announced the first three loans this week.

The other two loans are $1.68 million for NeighborWorks in Great Falls to provide 42 affordable homes in Belt and Cascade and $520,500 to Echo Enterprise to acquire 32 affordable homes in Havre.

The Department of Commerce plans to distribute all $15 million. As applications come in, the Montana Board of Housing, a governor-appointed council, evaluates them to make sure they are financially sound, organizations will be able to repay the loan and will serve the people they are targeting.

Once organizations repay their loans, the Department of Commerce will be able to make more loans.

Each year, the Department of Commerce oversees the development and rehabilitation of about 485 homes. The money for that work comes largely from federal dollars. Before the state Legislature created the Multifamily Coal Trust Homes Program, the only state-funded affordable home initiative was the Veterans Home Loan Program.

“We now have another tool to address affordable housing,” Brensdal said.

Perrin Stein can be reached at pstein@dailychronicle.com or at 582-2648.

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